One of my goals is to invest in rental properties. I'm looking at mostly duplexes and fourplexes. I am really looking into something that I can hopefully start building equity. The problem is it seems impossible to me when I look into the reality of it.

Here's my problem, I have no money to put down on anything. I have some credit debt but it's less than 6k. My credit rating is about 670 on avg and I rent, I do not own a house.

Now I am also married and my wifes credit debt is larger than mine, so after our marraige combined we have a pretty big debt (probably around 16K).

I work in the construction/maintenance business where getting paid is not always something that happens. I am owed a lot of back pay so my bank statements are mostly under 1k on avg.

I really want to do this but I feel like I'm tied down. Is there any hope for a guy like me to break into investing in real estate?

If so then where do I start? If not then where do I start?!?

"I work in the construction/maintenance business where getting paid is not always something that happens. I am owed a lot of back pay so my bank statements are mostly under 1k on avg."

I would get out of that line of business.Alot of this zero down stuff was written before the subprime meltdown,higher credit requirements,and less financing out there.

Generally I can find deals at 5 to 10 percent down with owner financing but not 100 percent. If you don't perform and they foreclose they will be out money so you have to bring some value to the table for them to do a deal.

In your situation I would go to work for an investor making a salary and learnign this business.Put away a certain percentage so later on you can start your own deals. You can also partner and do the labor side of the deal in return for a percentage of the profit. Just never beleive anything verbal and get everything in writing and run it by an attorney.

Your score of 670 isn't bad but 100 percent investor loans do not exist anymore. They want to see reserves,steady verifiable income, and time on the job.

"I would get out of that line of business"

I'm sick of dealing with it, that's why I decided to get into real estate, get my license and become an agent. The problem is I know I won't start making money out of the gate. I need the job I have now because it allows 100% flexibility. If I get another job and have to work 9-5 then I'll have no time to put into real estate.

In a perfect world I would have rental income to keep me alive and be able to pay bills while I spend 50+ hours a week being an agent. Unfortunately no world is perfect.

Being a REALTOR is completely different from being an investor - both can easily become full time (and more) careers.

Super's suggestion was perfect - to expand on it - don't get started in real estate if you've only got $1,000 in the bank and no steady income!

Go to work for an investory on a full-time basis if possible and learn the ropes. Scale down your monthly expenses so that you can afford to put some cash away to put towards your own investment, and you'll be fine... but if you try and do that while you're also trying to start up a real estate career you'll end up very far in debt with absolutely nothing to show for it.

ONE THING AT A TIME...and again - you absolutely do NOT want to start a real estate career with only $1,000 in the bank at any given time...you're asking for problems...

I like the advice here about getting a job with an investor but how is that done? Where would you find a "local" investor willing to "show you the ropes"?

Since no one actually answered the original question I'll go ahead. Buying real estate with no money down is a reality. BUT... don't think that's some kind of holy grail to riches, there are many properties that you can buy with no money out of pocket by simply taking over the seller's payments, but you shouldn't do it, because those payments are too high.

That said. I have a few ideas for you or anyone else thinking about getting started with real estate investing.

First, focus on getting yourself out of debt. If you can't manage your own personal finances you won't be any more successful with managing the finances of an investment portfolio.

Next, start with where you live. Are you renting an apartment? Become the superintendent/on-site manager so you can learn how to chase rent money and unclog toilets. If you're renting a house then ask your landlord if he/she will sell it to you on a rent to own basis, many landlords are happy to help a good tenant get on the road to home ownership. And if you're looking for someone to mentor you on investment, why not start by asking your own landlord a few questions?

Available cash, credit, and income are all irrelevant if you're willing to educate yourself and then take action. And forget about all those courses and bootcamps being peddled. You can find all the information you need for free on the internet and from networking at local investment groups.

Some of the investment properties you can find with no money down will require private lending. The challenge is to find a property with no money down which cash flows even though your holding costs / interest rates for private funds will be very high. It's possible to find such deals but you probably have to analyze many deals (hundreds) before finding one that works.

You also have to factor in the TIME it would take to find one of those types of properties. I am all about increasing ROI per hour earnings so time is money.

Many people just look at profit made but do not break it down by time spent to achieve that margin.

A agree. Wholesalers spend a lot of time finding these kinds of properties and their assignment of contract fee is well worth the time saved for the buyer investor.

[quote=super realtor]You also have to factor in the TIME it would take to find one of those types of properties. I am all about increasing ROI per hour earnings so time is money.

Many people just look at profit made but do not break it down by time spent to achieve that margin. [/quote]

This is probably not what you want to hear, but the first thing I would do is work on paying off your credit card debts.
Consider, for a moment, that under GREAT circumstances you might earn a 10% return on your investment through rental agreement each month. Your credit card's interest rate, on the other hand, is probably somewhere in the 12-24% range - costing you more than you would earn from a rental investment.
First, unburden yourself from that debt. Then, save some money, because you will HAVE to put down money, both as a down payment and to pay for settlement costs such as lender fees, title fees, appraisal fees, a million other fees you won't be expecting but will still have to pay for.
I'm a big fan of investing in rental properties, but you have to do it when you're in a financial position to do so properly.
Best of luck to you,

_____________________
Brian
Rental Agreement

With $1,000 in your bank will be very difficult to start. You have chance, find a good property and partner with some hard money lender. There are some of them that are agree for partnership., but you need to have really good property. You can flip and gain some cash. Your split will not be 50/50 but you would be able to find someone with for 50/50 as well. Good luck.

I believe the only way to buy no money down right now is for an owner occupant VA Loan. The days of zero down investment property buys are long gone.

Yes it is a reality. I do it all the time. Don't listen to anyone who says it can't be done. The whole idea is that money will be used to purchase a piece of property, It just won't be yours. Making it a no money down deal for you. Look up the terms "Private Lending" and "Hard Money Loans" when you get a chance. That will be some good reading for you.

In regards to your question "where do I start?"

Im a full time investor myself, and here is my advice. Go to google and search for the nearest REIA (Real Estate Investor Association) Group after finding it, go to the next meeting. If its a small fee for none members, go ahead and pay it. Walk up to investors and tell them that you are interested in bird-dogging for them. (A bird-dog basically locates deals for investors) Find out what they will pay for a deal, and let them know that you are trying to learn the business and this is a means to do just that. After a few conversations with a few investors you should be good. If you like that REIA then join it and take advantage of all the useful resources you can.

I hope that helps...

Use to be (2 years ago) you could do zero down, BUT no more. Not only that but if you could do zero down and have the rents cover the "nut", then you knew you bought the property right. Sadly, those days are gone. Very tough to refinance as well, especially with the fantastic rates currently.

Yes you can buy property with no money down and also cover the rehab cost and roll in all closing cost if you find the right property with enough equity. There are still private lenders who will lend up to 70% LTV or ARV on investment properties. So if you find a property you can purchase around 60 to 65% LTV and factor in the closing cost it can be done.

John Broussard
Newbridge Investments
www.newbridgehomeloans.com
http://twitter.com/hardmoneyTX
http://twitter.com/houstonlending

I'm not seeing the relationship between Buying with a 0% DP and your 70% LTV.

Where's the 30% Down Payment come from?

I think they are referring to a "Hard Money Lender" at 65 ARV value.

GOOD LUCK in finding that in this market.The HML's hit you up for so many points it is better to find a silent cash partner.

I started my real estate investing over seven years ago and said heck with it dropped everything and went full time right out of the gate, my wife did the same with me. I had bad credit and not much money, I am talking around 5 grand. Now here i am, almost eight years later, now I did step back and take a break for about two years. But i am back and better than ever. My point is regardless of what everyone else said or still say's I have never to this day put one penny down on any deal we have done. I have closed on houses for 16K all the way to 500K. I have never used a hard money lender now I have used private money from time to time. I have never used a partner and I doubt I ever will.

The thing to keep in mind when asking can I close no money down is, who are you asking? The one thing I have found out through it all is everyone's understanding of no money down is different. Two of the most profitable ways is subject to, and assignments in my opinion. Now a lot of people will tell you it does not work like it used to, I disagree. I still have great success with this even with the seasoning issues many experienced until recently. Do your homework know the property, if you present it right you will see results. And not every property has to high of a payment to do this. i have gotten them with interest rates in the 5's. Now let's just say the property was in default or the owner had a high interest rate, even these have potential. I have modified these loans and made them a deal. I will tell you it does not just fall in your lap, you will have to be on your toes and not give up. If i can be any help let me know.

2ndtimearound

I hear that robert allen's book teach this strategi. The title is Nothing Down. That is popular book.

The bottom line is if someone is selling at a 70 LTV with that much equity in the property you will have a cash investor within 24hrs of listing it.

If you are a buyer going after a hot deal and you need the seller to do A,B,C to buy no money down then you have NO LEVERAGE.A cash buyer at that point is a cleaner deal. AS-IS,no appraisal,no junk points,loan fees,asking for repairs,asking for the seller to take back a second they will be stuck with and can't sell on the open market.Assignments ? Unless that no money down junk buyer is putting down NON-REFUNDABLE earnest money there will be no assignment allowed. If you have a qualified buyer you won't know the quality of the buyer they are trying to assign the contract to.

So in short if you want to do a creative deal look to pay more money and if you have cash you can drive a much lower price.

Normally it's not low enough to justify the risk IMO. In all my years in real estate I've only seen one deal that was anywhere near 70% of its as-is value. Not much of a surprise then that I didn't get into wholesaling

What kind of deals are you doing in this market now that it has changed the past few years?

Nothing different I'm still doing lease options.

I would not suggest that you get into real estate without funds available to you. There are so many unexpected things that can happen such as vacancy and repairs. You could find yourself underwater very quickly.

I think you need to look into wholesaling(flipping houses). You will Find your Answers during your research on youtube.com and google trust me! Just remember not to believe the hype. We all fall into this business thinking about how easy it is to get rich, Yeah it's very possible but like anything else it takes work and dedication.

True. I bought my primary home with no money down back in the good old days. I rolled in all the closing cost and I think I used the 80/20 approach with 80% being interest only and the 20% a HELOC(home equity line of credit). I even had enough to build a screened in back porch, but I think those days are over. Thank goodness I refinanced to a fixed before the crisis hit. Nowadays, I purchase zero down from private lenders (tired landlords willing to owner finance). I have a page written about how I got to that point. See...

http://www.beginreal-estateinvesting.com/zero-down-real-estate-investing.html

Zero down financing is back in the Twin Cities for first time home buyers.

Program highlights:
Conventional 100% financing
680 minimum credit score
45% Debt-To-Income ratio or less
NO Mortgage insurance needed
Up to 3% in seller paids allowed
Income limits of $84,000 a year for a family of 1-4 people

Well with the qualifications that banks have now its almost impossible to do a zero down. They want you to have some equity in the house so you don't just walk away. You may be able to do something with a privet investor.

there are more problems and issues with rental properties in the long run, because of the people you rent the property to and you take on the landlord responsibilities and so much more. it does depend on what kind of rental property, but i suppose it is better to avoid rental properties

Its not a myth...No money down doesn't necessarily mean no money is involved in the transaction. I've purchased homes with "No Money Down". I purchased a house and borrowed the money from a hard-money lender, I partnered on the deal with a contractor who agreed to do the repairs. Then I sold the house, paid the loan and split the $40K profit with the contractor that I partnered with. This deal was done this year. I did not put any of my money down on this deal except when I marketed the home to sell it.

People see the infomercials and assume no money down means no money is involved when all it means is creative ways to finance deals or partner on deals so no money is coming out of your pocket. There are a ton of ways to do "no money down" deals even in this market.

I think the most important question here is not whether you get the loan but rather are you prepared for it? This was the biggest problem during the housing bubble of the past 5 years - people were jumping into investments that they were not prepared for. If you buy a rental property and the renters stop paying, will you have enough to cover the mortgage? If the roof suddenly starts leaking, will you be able to fix it out of pocket until the insurance company steps in? If the renters sue you, will you have enough saved up to afford a good attorney? These are all important questions that you MUST be able to answer unequivocally yes before you invest.

If you are in a rural location, there is a national program called RHS (Rural Housing) that offers a 0 down loan for a primary home purchase, if your income is within the qualifying guidelines. Both of you have to qualify for the loan, and with a mid 600's score, you shouldn't have any problem. If you write an offer on a property having the seller pay your closing costs, it's possible to get in with no money out of pocket at all. However, this is a federally funded program, and as such, it's subject to funding issues. They do tend to run out of money and that can leave you in the lurch. Talk to a lender and ask if the program is available and find out if you qualify. However, if you plan on doing this for investment purposes, it won't work. This is ONLY for a primary purchase. I'm a former mortgage broker, so I've done hundreds of these over the years.

The best way to get into a house with no money down is with an "Owner Finance" Otherwise you have risk of being upside down with your mortgage versus rent income.

Whoa, lots of conflicting opinions on this one. All I can come away with is, "Heed the cautions given here and see if you can make it work for you."

Yes you can do it!

One of the ways I have done it before is with JV(joint venture partners).

You need to find partners that are wanting to invest in real estate and have money and good credit.

You find the deals and approach them with the details. You can structure it so you are both on title, however because you aren't bringing a whole lot to the table you might want to offer your JV 75% off the property and you keep 25%.

You could also do some assignments as well. You put together the deal and assign it to someone else and charge a finders fee. This way you can build up some cash.

There are also sandwhich leases which will allow you to get started in the real estate investing world without your money or credit until you can get in a better situation.

Happy Investing

Jen
www.realestatefirsttimers.com

Absolutely you can buy with no money down.. and there's nothing wrong with it AS LONG AS YOU CAN CASH FLOW!! Cannot stress this enough.

Unfortunately you may not be ready to buy your first investment property quiet yet… there are a few key things you may need to do first before you can look to start buying investment property. Debt is going to be one of your biggest hurdles, but as you start to lower your debt you will also need to try to build up your savings. At this time all investment property purchased requires 20% down… so for this reason you may need to think a bit outside the box when aquiring investment property. For example all owner occupied buyers can buy property for as little as 3.5% down. So as you gradually build up saving you could buy your first duplex and live in half of it and rent the other half out. Once you continue to build your savings up you could rent out your side of the duplex and buy your next property! and so on and so forth!

Consider becoming a property manager or maintenance guy in a medium size apartment complex. You will have a place to live and get some 'on the job' training as you learn about rental management. (it ain't just collecting rent checks!)

Later, if you can buy a duplex, triplex... move in to one unit and rent the other(s)... pack away any Net Income over expenses and debt service... make sure you allocate reserve funding for replacement costs (appliances, carpet, roof, etc). The ONLY reason why investors buy income property is for the net cash flow. Increase that net and you've increased the value of your property. NOI x Cap Rate = Value. Increase the Net Operating Income and you've leveraged an increase in the value of your asset. Get the place leased up... looking nice... raise the rents a bit then flip it!

And then go do it again with another property with a few more units!

That's my 2 cents!

I am currently involved in an investment property that is no money down for ME. I belong to a small group of investors that combine the different resources together. My contribution to the group is my credit and willingness to buy properties and take on loans under my name. Others put up their cash. This property is no money down for ME but not for other investors, but they get a healthy 20% returns.

one good way is to find a seller willing to do a short sale because they don't want a foreclosure then market the property as a lease to purchase with say 15% down and if you have good credit you should be able to obtain financing on the short sale with 20% down.

So lets say you have a property worth $100,000 and the bank is willing to sell short for $65,000 you would have to come up with 20% which is $13,000 but you already have a lease purchase buyer with $15,000 to put down.

You make $2000 upfront and positive cash flow monthly, but Fannie Mae will typically only allow 4 investment properties, so don't just jump on the first one you find.

People have already mentioned it, but it's worth mentioning again: all the "no money down" housing loans are a big reason we had the crisis in the first place. People are not able to manage the foreseeable future, and do not plan for it. Something goes NOT according to plan and you find yourself in foreclosure.

in all sincerity, if your work experience is in construction, spending 50+ hours a week in real estate sales probably would not work out for you. it will drive you insane. sales is a far different animal than construction.

In Europe its harder to buy with no money down. In Croatia especially as bank loans are expensive.

I hadn't done one for a while; but I'm working a 100% financing deal right now with a USDA Rural Development Guaranteed Loan.

The Borrower makes nearly $50,000 per year teaching school and has over $400,000 in her 401K . . . . but she's wanting this Zero Down Payment Loan, and it's going to fly.

I thought things like this had dried up; but I was wrong. Not a problem.

Agreed. VA is probably the only way.

In Colorado, we have the USDA loan available in certain areas, VA (of course), and also some local banks that have a zero down loan, but with some strict credit standards. I would agree that VA is the best way to go if buyer is able.

To answer the OP's question, yes, it can be done. It would really depend on your strategy according to your state. Also, it's really up to you to have the mindset in talking to your clients into giving you a sweet deal.

What mindset is that? I'm not clear on what your suggestion is !

The OP "yezzo" IS NOT even an Agent . . . . he's in construction and maintenance. (or he was in 2008)

Who do you think his "Clients" are ?

If it's his employers . . . . why he can't even count on them to pay him ! And you're suggesting that he can talk them into giving him a "sweet deal" in buying one of their buildings with no money down ?

Owner Financing is a province normally reserved for those Sellers who own their property "outright", and when these Owners can't even pay their own maintenance people, I reckon that they're not members of that increasingly exclusive group.

So how's that work ? . . . . Sounds like a pipedream to me !

I offer ways for people to purchase investment property with no money down. I offer short term hard money loans that will lend up to 60-65% of an after repair value. In addition, I have connections with gap/equity partners who will partner with someone on a transaction in return for a fixed rate of return, participation on the back or a combination of both.

The limiting factor here is that these must be short term transactions, fix and flip type of deals. Buy and holds will not work with the program I have to offer. In addition I am only able to help in this manner for properties located in California. If you want to know more, feel free to contact me.